When Raghuram Rajan, Arvind Subramanian drew ‘flak’

Pune: Top financial gurus — RBI governor Raghuram Rajan and chief economic advisor Arvind Subramanian — got a “little flak” when at IMF, after their research paper on aid by rich nations got leaked to media and created a sensational headline.

Undeterred by the leak, which created headline “IMF says aid doesn’t work”, the two worked further on the paper and it went on to become one of the “most cited” research after finally being published.Recalling the incident that took place years ago, Dr Rajan said they were to present the paper at a Summit attended by all rich countries to discuss the aid given by them to the developing countries.

“Seven days before the Gleneagles Summit, the paper went public because of some ‘responsible’ journalists and the headline was ‘IMF says aid doesn’t work’. Now, I was an academic from outside and I had a job. That day, 18 finance ministers called the managing director of the IMF to complain about the kind of the work IMF was doing.

“We tried after that (some) sort of working on that paper and publish later on. I got a little of flak,” Dr Rajan said, while addressing students of RBI-run National Institute of Bank Management (NIBM) here during their convocation.

Dr Rajan was the chief economist and director of research at the IMF from 2003 to 2006, while Dr Subramanian was also part of its Research Department.Speaking to the NIBM students on Friday, Dr Subra-manian said he wanted to make a “confession” as he was known as “a very successful person, the CEA and so on.

Let me tell you that I failed the IAS exam. I failed in getting into the most prestigious stream at IMF. I wrote a mediocre PhD thesis. I had many many more academic papers rejected than accepted. And, just that Raghu does get too bloated, let me remind that he and I wrote a paper that was rejected three times.”